InvestorQ : How do you expect the stock of Kotak Bank to be impacted now that Uday Kotak is planning to reduce his stake in the Bank?
diksha shah made post

How do you expect the stock of Kotak Bank to be impacted now that Uday Kotak is planning to reduce his stake in the Bank?

Answer
user profile image
Deepa Salunkhe answered.
3 months ago


This sale of shares by the promoter of Kotak Bank is as per RBI stipulations where private promoters need to reduce their stake in the bank over a period of time. Uday Kotak will be selling Kotak Bank shares from his portfolio to the tune of $919 million in an effort to reduce his stake close to the statutory level of 26% as stipulated by the RBI. This stake sale will be at a price range of Rs.1215 to Rs.1240 and will reduce Uday Kotak’s stake from 28.93% to 26.1%. The target was to reduce the stake to 26% by end of July 2020. Now, Kotak cannot sell further shares for a period of 2 months as committed in the term sheet. It may be recollected that last week Kotak Bank had collected $1 billion through QIP placement to big institutions like INVESCO Oppenheimer, Canada Pensions and ICICI Pru AMC. This should be positive for the stock as the uncertainty over RBI stipulations will be behind.